Creative industry hoping for more tax breaks in Budget 2014

Freelancers
in the media, marketing, PR, design, digital, film and gaming sectors will be
watching George Osborne on Wednesday, to see if his recent warm words about the
creative industry translate into firm actions.

“The
creation of more tax reliefs is…vital to secure our competitive advantage,” the
CBI, the UK’s employers’ organisation, urged in a blog
posted in this year’s first quarter.

“The
UK is home to the best creative industries in the world and London remains the
major European destination for foreign and direct investment…however, now is
not the time for complacency or back-slapping”.

More
support for the UK’s creative workforce is critical because the introduction of
a 37.5% tax break in Quebec for the gaming industry has boosted its jobs by
more than a third, “largely at the UK’s expense,” the CBI said.

A
system of tax relief for UK games developers was floated by Mr Osborne to much
applause in 2012, but its roll-out has since been delayed as the European
Commission is yet to accept the initiative as suitable.

But
a signal on whether the UK is permitted to offer tax breaks for independent games
development may be included at Budget 2014, as the UK’s
creative industries minister has reportedly described the EC’s decision as “imminent.”

In
fact, Ed Vaizey, minister for Culture, Communications and the Creative Industries
last month said that, having personally worked very hard to achieve a
resolution, an announcement by Brussels was expected “very soon.”

“I
do think the tax credit is going to be a vital part of the success of the
industry,” Mr Vaizey was also quoted as saying by Develop.

“Because
we are experiencing another industrial revolution in my opinion, we’re experiencing
a creative industrial resolution and games are a part of it.”

An
all-clear from the European Commission will be welcomed by TIGA, the trade
association for the UK video game industry, which is calling for more support
for the sector’s start-ups and a greater focus from developers on business
skills.

Speaking
this month, the group’s chief executive Dr. Richard Wilson explained: “When we
speak to our members we hear that, first and foremost, the biggest challenge
indie developers face is business survival and the bottom line – funding and
cash flow”.

In
attendance at TIGA’s latest conference was Richard Heap, a partner at
accountancy firm Kingston Smith, who echoed the importance of sound business
skills if games developers, or any other type of creative business, want to
succeed.

“With any
creative industry, and indeed with any creative person, there will always be a
preference for focusing on the product, the design, or the idea,” he said.

“But right now, we are in an environment where
a lot of start-ups [are] competing for funds and they won’t get a second chance
if things go awry.

“So
skills such as how to plan a business model, how to map out and forecast your
revenue and cost streams, your cashflows, evaluating which markets and
platforms to prioritise, these aren’t nice-to-haves anymore.”

As a supporter
of the campaign, Mr Osborne could use his Budget to alert would-be business
owners that the Centre for Entrepreneurs is taking over Start-Up Britain’s work,
or he may trumpet the ongoing work of Start-Up Loans, the government-backed
scheme.

Yet
Budget 2014 could see something more radical to help aspiring business owners.
At the recent conference of the Federation of Small Businesses, the Treasury
said it was “hungry for ideas” on what the chancellor could do to boost the
smallest traders, such as freelancers.